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New Report Shows Need for Continued Efforts to Protect IP and Fight Piracy

Ross Marchand on 2017-01-06 08:00:00


In the world of cinema, 2016 will be remembered for being the year of the narrative. Large movie studios have continued to spawn webs of interrelated films, with planned future installments charted well into the future. Classic movie franchises and universes are overcoming the “sequel curse,” in which successor films fail to keep audiences engaged. Investments needed to power the Marvel and Star Wars movie brands, however, are being hampered by the rise of digital piracy. One estimate shows that roughly half of adults in the US illegally pirated movies, depriving filmmakers billions of dollars in revenue each year. TorrentFreak, a news publication focused on file-sharing news, estimated that Deadpool, Batman v. Superman, and Captain America: Civil War were the three most illegally downloaded movies in 2016. Although the organization doesn’t track total download counts, a similar list compiled by tracking agency Excipio for 2015 movies shows that the top three for that year were each downloaded over 40 million times.

Assuming that 2016’s top pirated movies were each downloaded 40 million times and taking into account the average price of a movie ticket ($8.42), movie producers and theaters lost more than $320 million per movie to pirating. If nothing changes, filmmakers will capture a rapidly decreasing share of movie revenues and take less risks in future project development. Complex CGI renderings of deceased actors that wowed moviegoers in 2016 require years of painstaking, expensive work, and may screech to a halt without a stable revenue environment.

Lack of federal enforcement of intellectual property statute creates a “Wild West” environment of ineffective litigation and unpredictable legal penalties. In a system where suing illegal downloaders often costs far more than recovered revenue, movie producers make $500,000 examples out of college students. A more predictable system would lead to more reasonable, albeit widespread, levies against illicit watchers.

Additionally, Congress can stem the tide of piracy by quashing rules and regulations that inadvertently harm the industry’s ability to undermine pirating. Smaller theater chains such as iPic have partnered with streaming sites to simultaneously air movies online and in theaters. These moves would allow would-be downloaders to legally obtain films online immediately after release while guaranteeing theaters a cut of the revenues. Widespread revenue sharing between cinemas and digital platforms can put a dent in piracy; immediate legal availability of films has been shown empirically to reduce illegal downloads. New regulations mandating that theaters provide closed movie captioning may, however, force the closure of many smaller chains, and undermine these innovative practices.

Destructive regulations weakening intellectual property are not limited to the United States. The European Union’s proposed Digital Markets Union would impose onerous content quotas and taxes on streaming services, reducing offerings to online viewers and bolstering illegal substitutes. These moves have ramifications for US producers, as many illegally downloaded movies are first uploaded in European republics. Both in America and throughout the world, strengthening intellectual property requires a holistic approach. By restoring the rule of law in 2017, Congress can help producers return to a galaxy far, far away, and ensure that Iron Man is more than just a paper tiger. 

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